Tuesday, August 20, 2013

Separating Fact from Fiction In Accounts of Germany’s Renewables Revolution

Separating Fact from Fiction In Accounts of Germany’s Renewables Revolution

Myth #2: Renewables undermine grid reliability

Another common misreportage theme is that renewables are degrading the reliability of Germany’s power supply, driving industry abroad. The president of Germany’s network agency has confirmed this is not true. Hearsay anecdotes alleging renewable-caused power glitches are often traceable to Der Spiegel, a frequent source of anti-renewable stories, but evaporate on scrutiny. Charles Mann in The Atlantic cites five references to bolster such claims, but his sources (cited in my response) don’t support his case. One, from a Koch-allied anti-renewable front group (whose political arm, the American Energy Alliance, lobbies for fossil fuels and against renewables), claims renewables are “causing havoc” in the German grid, the other four sources don’t, and none of the five offers any evidence this is happening, because it’s not—as I confirmed with German experts in May 2013, when I was co-keynoting the Chancellor’s electromobility conference in Berlin.
But Der Spiegel is not alone in such misreporting. Die Zeit and others have described local electricity problems caused by a failed coal plant and by restricted Russian gas deliveries as if they proved the unreliability of renewables, which had nothing to do with them. Focus likewise blamed a Munich power outage on renewables, then reported the actual, unrelated cause (a transformer blew up) without a correction.
To be sure, Germany’s grid, built for central stations, was scarcely expanded as renewable generation soared from 3 percent to 23 percent in 20 years. Grid modernization and debottlenecking are therefore needed and are vigorously underway—though the network agency recently slashed plans for new transmission corridors by nearly half because many projects proved unnecessary, and grid investments apparently needn’t rise. But fear of what might happen if those future grid improvements weren’t made doesn’t justify the lie that blackouts and brownouts are rife today.
In fact, German power, like 22-percent-solar-and-windpowered Spanish and 30-percent-windpowered Danish power (both for all of 2012), remains far more reliable than U.S. power and is getting even more reliable. Germany ranks #1 in European grid reliability, Denmark just behind, both about tenfold better than the U.S. Likewise, as Spain’s solar and windpower soared in the past few years, Spain’s reliability index rose too. Across Europe, renewable expansion correlates with more reliable power. Now a German company has even assembled a 570-MW virtual power plant of dispatchable renewables, available nationwide to firm (guarantee steady output from) the varying wind and solar output. Dispatching variable resources is more complex, but the grid’s skilled operators do it well.
The next round of misreporting will doubtless emerge from a new grid-operator survey showing that 7 percent of German firms surveyed (or 25 percent of those that could in principle move production abroad) say they are considering doing so “because of a (possible) worsening of grid reliability.” However, no trend can be inferred because this question was never previously asked; no comparison is possible because it wasn’t asked in other countries; and, of course, reduced reliability is a future hypothetical, not a present reality. The European standard metric, to be sure, doesn’t include outages shorter than three minutes, so vague claims that even briefer outages are rising in Germany can’t be tested from the data—only cast in doubt by lack of specific anecdotal examples

Myth #3: Renewables subsidies are cratering the Germany economy

Perhaps most confusing is Germany’s lively debate about the surcharge that utility customers pay to finance the feed-in tariff (“FIT”)—a fixed 20-year power purchase contract offered to anyone installing new renewable generators, whether solar, wind, biomass-fueled, or other kinds. (Since 2012, you can instead choose market-based payments, as half of renewable producers and four-fifths of windpower operators do, and since autumn 2012, new solar systems over 10 megawatts are no longer eligible for FITs). The FIT declines as renewables’ growth drives down their prices; rooftop solar’s FIT is falling 1.8 percent every month. But partly because prices are falling, solar sales are far outpacing forecasts, raising the surcharge. USA Today columnist Sumi Somaskanda recently wrote: “German consumers are waking up to the costs of going green: As of Jan. 1, they are paying 11 percent more for electricity than they did last year thanks to government plans to replace nuclear plants with wind and solar power that requires significant and constant public money to be made cost effective.” But as I wrote in April, the truth is quite different.
Germany’s renewables surcharge is artificially inflated by hefty and rising industry exemptions that place greater burdens on households—a policy now under legal investigation by the EU as a potential illegal subsidy—but it is not public money, is not a subsidy (Germany hasn’t subsidized photovoltaics since 2004), and is a minute drop in the bucket of German households’ energy costs. It works just like the way many American households pay prices set by state regulators for approved power plants, only it’s far more transparent—and in Germany you have the option of earning back your payments, and far more, by investing as little as $600 in renewable energy yourself. Citizens, cooperatives, and communities own more than half of German renewable capacity, vs. two percent in the U.S.
In 2013, the FIT surcharge raised households’ retail price of electricity 7 percent but renewables lowered big industries’ wholesale price 18 percent. As long-term contracts expire, the past few years’ sharply lower wholesale prices could finally reach retail customers and start sending households’ total electricity prices back down. The latest analysis suggests that this may even occur in 2014, sooner than expected.

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